Cost, Compliance & Risks

Week three of the U.S. Government shutdown has begun, and agencies responsible for administering export controls, sanctions, and other trade-related functions have been affected by the lapse in federal appropriations.  This means that companies need to be prepared for extended licensing and processing wait times, along with increased wait times for any communications with the agencies, including advisory opinions. Accordingly, companies must operate — and continue to operate — in accordance with law and regulation. The shutdown requires increased vigilance on the part of those regulated by or working with the government (see here for advice for federal contractors). With that in mind, see below for the key international trade-related agencies impacted by the shutdown and suggestions on how industry should properly respond.
Continue Reading 2019 Government Shutdown: The Export Controls, International Trade, and CFIUS Edition

Here we are again. Large swaths of the federal government have been closed since December 22 because Congress and the president cannot agree on legislation to fund the government. Nearly a million federal employees are not receiving their paychecks. Even larger numbers of government contractors are – as is often the case – left squarely at the bottom of the hill, dodging the boulders of political mismanagement that are raining down in a landslide of “stop-work” orders. For example, as has been reported, the Department of Homeland Security’s Federal Emergency Management Agency (FEMA) took affirmative steps to publicize and issue a “blanket” stop-work order on December 26 – the day after Christmas – giving many affected contractors a post-holiday cocktail of uncertainty and dread. Other agencies have followed suit, with the Departments of Justice, Agriculture, Commerce, Housing and Urban Development, Interior, State, Transportation, and Treasury issuing such orders over the past few weeks.
Continue Reading Contractors in the Crosshairs – Weathering the 2019 Government Shutdown

On November 19, 2018, the Bureau of Industry and Security (BIS) published an Advanced Notice of Proposed Rulemaking (Notice) seeking comments from industry on how to define and identify “emerging technologies” that currently are not export controlled but which ought to be because they are “essential to the national security of the United States.” Yes, you read that correctly – BIS seeks industry input as to whether it should subject industry’s emerging technologies to export controls and, by extension, to likely review by the Committee on Foreign Investment in the United States (CFIUS) of any sales or control of such technology to foreign investors. For those who have something to say about this impending regulatory storm, comments on the Notice are due to BIS by December 19, 2018.
Continue Reading Emerging Technologies May Get Export Controls and CFIUS Reviews This Holiday Season

In June 2018, the White House[1] outlined the threats posed by China’s investment in and acquisition of U.S. companies, noting that China is engaged in “state-sponsored IP theft through physical theft, cyber-enabled espionage and theft, evasion of U.S. export control laws, and counterfeiting and piracy.”[2] Apparently, someone recognized that those $1 million-to $5 million-dollar companies in Silicon Valley may be getting capital injections from folks who are not in it simply for the investment return. Worse still, until now, the United States has had no mechanism to review or prevent such foreign investment and resultant control.

Continue Reading FIRRMA Becomes Law, Reforming CFIUS, Export Controls, and Forever Changing Diligence in Foreign Direct Investment and Structuring of Public and Private Equity Deals – Intellectual Property and Technology Law Journal

The Demon: What an excellent day for an exorcism.
Father Karras: You would like that?
The Demon: Intensely.

Honestly, it was challenging finding an all-audiences quote from William Peter Blatty’s “The Exorcist,” but we believe that this quote is exactly what federal contractors need to know. Today is indeed an excellent day for an information system exorcism and, unlike Father Karras, federal contractors know the name of that which they must purge: Kaspersky Lab.Continue Reading The Russian Exorcism of US Gov’t Contracts

July 6th will mark the entry into force of Section 301 tariffs against China. Section 301 of the Trade Act of 1974 provides the president with the authority to respond to unfair, unreasonable, or discriminatory trade practices and gives the Office of the U.S. Trade Representative (USTR) the ability to take action to compel another country to eliminate the offending act, policy, or practice, with the president’s approval. Surprising no one, this president concluded that the United States is being taken advantage of in the global trade regime. What followed was a decision to impose tariffs on China and most of our other largest trading partners.
Continue Reading A Scorching Summer for Global Trade (and a few words on the Global Game)

In June, the White House released a report outlining the threats posed by China’s investment in and acquisition of U.S. companies. Spoiler alert: The report noted that China is engaged in “state-sponsored IP theft through physical theft, cyber-enabled espionage and theft, evasion of U.S. export control laws, and counterfeiting and piracy.” Apparently, someone recognized that those $1 million to $5 million-dollar companies in Silicon Valley may be getting capital injections from folks who are not in it simply for the investment return. Worse still, until now, the United States has had no mechanism to review or prevent such foreign investment and resultant control.
Continue Reading Significant CFIUS and Export Control Reforms Target Foreign Direct Investment and Structuring of Public and Private Equity Deals

Buried in a grab bag of seemingly innocuous course-correcting changes to the Bayh-Dole Act regulations (effective May 14 of this year) is the removal by regulators of the sixty-day window between the federal agency’s notice of a contractor/grantee’s failure to give timely notice of inventions in order to secure title and the federal agency’s ability to take title and strip contractors and grantees of what may be their most valuable assets – i.e., their intellectual property. Now the Government is no longer constrained by this time limitation, and it may grab title to inventions conceived or reduced to practice with Government funds at any time should the contractor/grantee fail to follow the rules.
Continue Reading Contractors and Grantees Beware! Safe Harbors Removed in Preserving Patent Ownership Rights Under Bayh-Dole

Years ago I witnessed the owner of a Staten Island car dealership talking to his sales staff about their end-of-model-year sale. The dealership owner flogged and lashed about incentives, rebates and financing, but the message was singular: We’re here to deal! I was reminded of this on April 19, 2018, when our current President issued National Security Presidential Memorandum No. NSPM-10 (the Memorandum) outlining the new Conventional Arms Transfer (CAT) Policy. While it’s incongruous to equate the sale of the F-35 Joint Strike Fighter with a Nissan, the new CAT policy is clear: We’re here to deal!
Continue Reading Send Lawyers, Guns and Money: The New Conventional Arms Transfer Policy

Alex Major is a contributing author to the Nuix 2018 Black Report: Decoding the Minds of Hackers, a unique report that engages professional hackers, penetration testers, and incident responders to understand the security threat landscape companies face. Alex, a former intelligence officer, focuses his chapter on why companies need to properly select and structure their…